The Expert Podcast

…A few weeks ago we did an article about what is really behind the housing crisis and the shortage of homes And, we talked a lot about how in many. markets it's very difficult and time-consuming to get a project permitted. And off the ground. And a lot of, viewers wrote in and said does it really take that long Well, coincidentally, an article in a local newspaper to San Francisco. Ran an investigative report about how long it takes to build. in San Francisco and the title is yes it takes forever to build anything in San Francisco. And that is why luxury housing is all that gets built which is exactly what we talked about a few weeks ago. So the question is how long is forever. In San Francisco before we scroll down and take a look at the times. What is your instinctive thought How long does it take to get permits? Few weeks few months. Right. So let's take a look at the actual times. Between the planning department and department of bill. and various other city agencies to have to sign off on every plan and every revision. Small time builders Facebook could be three or four years of bureaucracy. Before they can start. They construction process, which could self take over a year. What may take a few months in other parts of the country, the entitlement and permitting process in San Francisco has become an industry unto itself. Employing consultants and expediters, which only the richest developers can afford. What are the times that they did now They went back and looked at every permit that was issued for the last few years and found that it takes an average of 627 calendar days for a multifamily development. But more than that for single family, 861 days for duplex or single family. That's two and a half years Plus. None of this even includes the planning or entitlement process that becomes before permits are sought. So when you first buy a property, before you start getting permits you have to make sure that it matches their planning for that area and the entitlement for the community. And it's not gotten better. The Chronicle which is the paper that did this found the times or permits have increased 83% since 2012 That's 10 years. That's not a huge amount of time. You would think that. Technology efficiency Automation would bring down permitting times, especially since the environmental we're in. In theory. a place like San Francisco would want more houses being built for their housing issues. But in the last 10 years the permit times have gone up not down. And people in the field suggests that the reason so much luxury housing gets built as opposed to anything else. Isn't greed as much as nothing else is profitable. It permitting takes two years And we talked about this in the last video. If you have to wait two years to get your permits and your approvals done or three. You have to pay carrying costs on that property for that period of time. Taxes and fees. interest ownership fees, plus the carrying costs of your business. All your fixed overhead your equipment. That has to be factored into what you're going to sell that property for. So if you're going to look to sell something that is. entry level or first time buyer type pricing. I can't. It can't be baked into that kind of a property If you have all those fees. It's supposedly the government says it has some type of permit streamlining process but no one has seen any results of this. Right. In the last decade 270 projects in San Francisco took more than four years to get their approvals. So what are your thoughts on this Do you find that permitting is difficult where you're located as a contractor? Are you finding that. streamlining it is gotten better or worse in the past few years And what are your thoughts on how this may affect the housing market in certain areas?